Need input/advice from folks who know about short sales/foreclosures of a rental property

[_Snake_]

Your not going to get approved for a short sale on a rental property with equity in your primary home. They will simply tell you to take out an equity loan on your current house and pay them. To get approved they will require you to give them statements on EVERYTHING you own, including 401ks etc.

You have the option of letting it go and they will sue and win for the difference between what you owed and what it sold for, plus ALL of their expenses including legal fees. They will then either go after your wages or the equity in your house. Which will be an easy way for them to get paid.

The only way to get a short sale approved is to have no way of paying. I went through it with my wifes father not once, but twice. He is another story though.

The first time he filed for bankruptcy and did the forclosure thing, 7 years later he was able to buy another house which went into a short sale within 3 years. He got lucky and the bank agreed to take 10k less than he owed and let him off the hook. But he had less than $100 to his name when it happened.

Good info here. Short sales on a home that isn’t your primary residence are incredibly uncommon.

A foreclosure alone can drop your credit score up to 300 points and it’ll take 6-7 years of being responsible to
repair it.

OP, I’m sorry to hear you’re in this predicament. I worked in the mortgage servicing industry for 8 years and would be happy to answer any other questions you might have.

 

[CobraJohn01]

Thanks everyone for the time to provide feedback and knowledge. We're still waiting to see what the final estimate is going to be and see what we can do to try to sell the house. I can see from some of the posts that trying to do a short sale is pretty much not an option and a foreclosure, which was always plan D or E anyways, is just about as unlikely now knowing how it would likely go down.

The house isn't in a terrible neighborhood, but it's not a great one either. Kind of fringe. Wasn't like that when we bought it though. Was actually nice and quiet. Now, some section 8 properties in the surrounding areas, some obvious deadbeat renters on our street and the adjoining ones as well. Renting is REALLY not something we want to have to resort to if we don't have to. I'd rather lose some money on selling the house than have to keep on dealing with a rental situation.

Also, for those who have mentioned it, the person who has ruined the house is absolutely being kicked out. He already had to mostly evacuate due to the mold and roach issues anyways, on top of no floors, walls or working plumbing in the bathroom. We may consult a lawyer (if we can afford to once this is all done with) to see if we have any realistic option to sue if he refuses to make some kind of attempt to make us whole.

 

[ford fanatic]

We were in your situation a few years, except for all the damage, and let our rental go in a short sale. It rented for about 4 years, but we were still way under water on it (wife bought it new in 06).

 

[ford fanatic]

Your not going to get approved for a short sale on a rental property with equity in your primary home. They will simply tell you to take out an equity loan on your current house and pay them. To get approved they will require you to give them statements on EVERYTHING you own, including 401ks etc.

You have the option of letting it go and they will sue and win for the difference between what you owed and what it sold for, plus ALL of their expenses including legal fees. They will then either go after your wages or the equity in your house. Which will be an easy way for them to get paid.

The only way to get a short sale approved is to have no way of paying. I went through it with my wifes father not once, but twice. He is another story though.

The first time he filed for bankruptcy and did the forclosure thing, 7 years later he was able to buy another house which went into a short sale within 3 years. He got lucky and the bank agreed to take 10k less than he owed and let him off the hook. But he had less than $100 to his name when it happened.

What is the amount that you owe and what do you think it would sell for if you were to list it as is?

We were able to short sale our rental (my wife's house before we got married) and had about $200K equity in our current residence. We did not get sued for the difference either. We also make close to $200K combined...

 

[sleek98]

We were able to short sale our rental (my wife's house before we got married) and had about $200K equity in our current residence. We did not get sued for the difference either. We also make close to $200K combined...

Good deal. That is not the norm from what I have seen.

 

[coposrv]

We were able to short sale our rental (my wife's house before we got married) and had about $200K equity in our current residence. We did not get sued for the difference either. We also make close to $200K combined...

Nice....up 200k on one and walked from another with an almost 200k income. I wouldn’t let too many people know about that.


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[BlckBox04]

It sure would be great if people had some responsibility for their loans. The practice of walking away from loans like this is disgusting. Be a man and take care of your shit instead of dumping your poor decisions on someone else.

did you eve read his original post?

 

[ford fanatic]

Nice....up 200k on one and walked from another with an almost 200k income. I wouldn’t let too many people know about that.


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We showed all the required documentation, didn't hide a thing.

 

[Blown 89]

did you eve read his original post?

Every word